Lottery operator defends its reputation running games in other states

By November 16, 2012 at 1:59 PM

Though a retailers group is not wavering in its campaign against the Gov. Chris Christie administration's plans to privatize the sales and marketing operations of the New Jersey Lottery, a representative for one of the companies planning to bid on the state's proposal said the coalition's concerns are unfounded, based on the firm's existing operations in Illinois and Europe.

"In the first year of our operations in Illinois, the lottery has seen 18 percent growth under our management — making it one of the fastest-growing lotteries in the U.S.," said Robert Vincent, a spokesman for GTECH Corp., a Providence, R.I.-based subsidiary of Lottomatica, which the Big Gamble NJ grassroots campaign is most opposed to managing New Jersey's lottery. "That success is a strong credential for us … and we have a broad level of experience in being able to take on new lottery operator roles."

Of the four potential bidders for the 15-year contract to take over the state lottery's marketing and sales arms, Vincent said GTECH has "earned the position of being one of the only private lottery managers in U.S.," noting the firm holds the majority stake in an "80-20 partnership" with Scientific Games Corp., which has been operating Illinois' lottery since July 2011, and it won a contract to singlehandedly run Indiana's lottery in October.

"Our role to date in New Jersey is a lottery technology solutions provider, but that's not to say we don't have other skills that they're looking for in lottery management," Vincent said.

While Satish V. Poondi, director of legislative affairs for Green Brook-based Asian-American Retailers Association — which formed the Big Gamble NJ coalition with the Communications Workers of America — said GTECH is underperforming in Illinois after it "promised bells and whistles," Vincent said the firm holds "a complicated contract as to how you get penalties and incentives, and there's still more to come from Illinois on what those are, though we've expressed we will easily meet our commitments as they are adjusted."

Even if GTECH keeps its promises by increasing lottery revenues in Illinois and Indiana — and potentially New Jersey — Poondi said the company's Internet sales platform would block brick-and-mortar businesses from entering the market and shift lottery revenues from small retailers to the online marketplace.

But Vincent said the firm's online lottery business in Illinois has barely reached 1 percent of overall sales, and based on its years of experience operating Internet lottery platforms in Europe, he said it could take up to five years for any state's Web-based sales slice to grow to 10 percent.

The companies competing for the lottery contract are New York-based Scientific Games, United Kingdom-based Camelot Group, Greece-based Intralot and GTECH. Bids are due to the Division of Purchase and Property on Dec. 4.